[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 510 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 510
To amend the Internal Revenue Code of 1986 to impose a tax on the net
value of assets of a taxpayer, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 1, 2021
Ms. Warren (for herself, Mr. Markey, Mrs. Gillibrand, Mr. Whitehouse,
Mr. Schatz, Mr. Sanders, Mr. Merkley, and Ms. Hirono) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to impose a tax on the net
value of assets of a taxpayer, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ultra-Millionaire Tax Act of 2021''.
SEC. 2. IMPOSITION OF WEALTH TAX.
(a) In General.--The Internal Revenue Code of 1986 is amended by
inserting after subtitle B the following new subtitle:
``Subtitle B-1--Wealth Tax
``Chapter 18--Determination of Wealth Tax
``CHAPTER 18--DETERMINATION OF WEALTH TAX
``Sec. 2901. Imposition of tax.
``Sec. 2902. Net value of taxable assets.
``Sec. 2903. Special rules.
``Sec. 2904. Information reporting.
``Sec. 2905. Enforcement.
``SECTION 2901. IMPOSITION OF TAX.
``(a) In General.--In the case of any applicable taxpayer, a tax is
hereby imposed on the net value of all taxable assets of the taxpayer
on the last day of any calendar year.
``(b) Computation of Tax.--
``(1) In general.--The tax imposed by this section shall be
equal to the sum of--
``(A) 2 percent of so much of the net value of all
taxable assets of the taxpayer in excess of $50,000,000
but not in excess of $1,000,000,000, plus
``(B) the applicable percentage of so much of the
net value of all such taxable assets in excess of
$1,000,000,000.
No tax shall be imposed under subsection (a) on the net value
of taxable assets not in excess of $50,000,000.
``(2) Applicable percentage.--
``(A) In general.--For purposes of this section,
the applicable percentage is--
``(i) except as provided in clause (ii), 3
percent, and
``(ii) in the case of any calendar year in
which there is in effect legislation which
meets the requirements of subparagraph (B), 6
percent.
``(B) Legislation described.--Legislation meets the
requirements of this paragraph if such legislation--
``(i) establishes a health insurance
program that provides to all residents of the
United States comprehensive protection against
the costs of health care and health-related
services, and
``(ii) prohibits private entities from
providing duplicate benefits.
``(c) Applicable Taxpayer.--
``(1) In general.--The term `applicable taxpayer' means any
individual or any trust (other than a trust described in
section 401(a) and exempt from tax under section 501(a)).
``(2) Treatment of married individuals.--For purposes of
this section, individuals who are married (as defined in
section 7703) shall be treated as one applicable taxpayer.
``(3) Treatment of trusts.--
``(A) In general.--All trusts with substantially
the same beneficiaries shall be treated as a single
applicable taxpayer.
``(B) Transfers of property between trusts.--If a
trust transfers property by gift or decantation to
another trust in any calendar year after December 31,
2020, the transferor trust and the transferee trust
shall be treated as a single applicable taxpayer for
such calendar year.
``SEC. 2902. NET VALUE OF TAXABLE ASSETS.
``(a) In General.--For purposes of this subtitle, the term `net
value of all taxable assets' means, as of any date, the value of all
property of the taxpayer (other than property excluded under subsection
(b)), real or personal, tangible or intangible, wherever situated,
reduced by any debts (including any debts secured by property excluded
under subsection (b)) owed by the taxpayer.
``(b) Exclusion for Certain Assets Under $50,000.--Property of the
taxpayer shall not be taken into account under subsection (a) if such
property--
``(1) has a value of $50,000 or less (determined without
regard to any debt owed by the taxpayer with respect to such
property),
``(2) is tangible personal property, and
``(3) is not property--
``(A) which is used in a trade or business of the
taxpayer,
``(B) in connection with which a deduction is
allowable under section 212, or
``(C) which is a collectible as defined in section
408(m), a boat, an aircraft, a mobile home, a trailer,
a vehicle, or an antique or other asset that maintains
or increases its value over time (within the meaning of
section 5.02(2) of Revenue Procedure 2018-08).
``(c) Rules for Determining Property of the Taxpayer.--For purposes
of this subtitle--
``(1) Property included in estate.--Any property that would
be included in the estate of the taxpayer if the taxpayer died
shall be treated as property of the taxpayer.
``(2) Property of grantor trusts.--If an individual is
treated as the owner of any portion of a trust under subpart E
of subchapter J of chapter 1, property attributable to such
portion of the trust shall be treated as property of the
individual and not as property of the trust.
``(3) Inclusion of certain gifts.--Any property transferred
by the taxpayer after the date of the enactment of this
chapter, to an individual who is a member of the family of the
taxpayer (as determined under section 267(c)(4)) and has not
attained the age of 18 shall be treated as property of the
taxpayer for any calendar year before the year in which such
individual attains the age of 18.
``(d) Establishment of Valuation Rules.--Not later than 12 months
after the date of the enactment of this section, the Secretary shall
establish rules and methods for determining the value of any asset for
purposes of this subtitle, including rules for the valuation of assets
that are not publicly traded or that do not have a readily
ascertainable value. Such rules and methods--
``(1) may utilize retrospective and prospective formulaic
valuation methods not currently in use by the Secretary,
``(2) may require the use of formulaic valuation approaches
for designated assets, including formulaic approaches based on
proxies for determining presumptive valuations, formulaic
approaches based on prospective adjustments from purchase
prices or other prior events, or formulaic approaches based on
retrospectively adding deferral charges based on eventual sale
prices or other specified later events indicative of valuation,
and
``(3) may address the use of valuation discounts.
``SEC. 2903. SPECIAL RULES.
``(a) Deceased Individuals.--
``(1) In general.--In the case of any individual who dies
during a calendar year and who is not married on the date of
such individual's death--
``(A) section 2901 shall be applied by substituting
`the date of the applicable taxpayer's death' for `the
last day of the calendar year', and
``(B) the amount of the tax imposed under such
section shall be reduced by an amount which bears the
same ratio to such amount (determined without regard to
this subsection) as--
``(i) the number of days in the calendar
year after the date of the individual's death,
bears to
``(ii) 365.
``(2) Coordination with estate tax.--For purposes of
section 2053, the tax imposed by this section for the year of
the decedent's death shall be considered to have been imposed
before such death.
``(b) Application to Non-Residents.--In the case of any individual
who is a non-resident and not a citizen of the United States, this
subtitle shall apply only to the property of such individual which is
situated in the United States (determined under rules similar to the
rules under subchapter B of chapter 11).
``(c) Application to Covered Expatriates.--In the case of an
individual who is a covered expatriate (as defined in section 877A),
section 2901(a) shall be applied--
``(1) as if the calendar year ended on the day before the
expatriation, and
``(2) as if the rate of tax under both subparagraphs (A)
and (B) of section 2901(b)(1) were 40 percent.
``SEC. 2904. INFORMATION REPORTING.
``(a) In General.--Not later than 12 months after the date of the
enactment of this section, the Secretary shall by regulations require
the reporting of any information concerning the net value of assets
appropriate to enforce the tax imposed by this chapter.
``(b) Method of Reporting.--The Secretary shall, where appropriate,
require the reporting made under subsection (a) to be made as a part of
existing income reporting requirements (including requirements under
chapter 4 (relating to taxes to enforce reporting on certain foreign
accounts)).
``(c) Responsibility for Reporting.--The Secretary may impose
reporting obligations by reference to the ownership, control,
management, claim to income from, or other relationship to assets and
liabilities for purposes of administering the tax imposed by this
section and may impose such obligations on financial institutions,
business entities, or other persons, including requiring business
entities to provide estimates of the value of the entity itself.
``SEC. 2905. ENFORCEMENT.
``The Secretary shall annually audit not less than 30 percent of
taxpayers required to pay the tax imposed under this chapter.''.
(b) No Deduction From Income Taxes.--Section 275 of the Internal
Revenue Code of 1986 is amended by inserting after paragraph (6) the
following new paragraph:
``(7) Taxes imposed by chapter 18.''.
(c) Extension of Time for Payment of Tax.--
(1) In general.--Section 6161(a) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(3) Wealth tax.--
``(A) In general.--In the case of an applicable
taxpayer described in subparagraph (B), the Secretary
may extend the time for payment of the tax imposed
under chapter 18 for a reasonable period not to exceed
5 years from the date fixed for the payment thereof.
``(B) Taxpayers described.--An applicable taxpayer
is described in this subparagraph if such the Secretary
determines--
``(i) the applicable taxpayer has severe
liquidity constraints, or
``(ii) immediate payment would cause undue
hardship on an ongoing enterprise.
``(C) Applicable taxpayer.--For purposes of this
paragraph, the term `applicable taxpayer' has the
meaning given such term under section 2901.''.
(2) Rules.--Not later than 12 months after the date of the
enactment of this Act, the Secretary of the Treasury (or the
Secretary's delegate) shall establish rules for the application
of the amendments made by paragraph (1).
(d) Application of Accuracy Related Penalties.--
(1) In general.--Section 6662(b) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(10) Any substantial wealth tax valuation
understatement.''.
(2) Substantial wealth tax understatement.--Section 6662 of
such Code is amended by adding at the end the following new
subsection:
``(m) Application to Substantial Wealth Tax Valuation
Understatement.--
``(1) Substantial wealth tax valuation understatement
defined.--
``(A) In general.--For purposes of this section,
there is a substantial wealth tax valuation
understatement if the value of any property claimed on
any return of tax imposed by subtitle B-1 is 65 percent
or less of the amount determined to be the correct
amount of such valuation.
``(B) Limitation.--No penalty shall be imposed by
reason of subsection (b)(10) unless the portion of the
underpayment attributable to substantial wealth tax
valuation understatements for the calendar year exceeds
$5,000.
``(2) Increased penalty.--
``(A) In general.--In the case of any portion of an
underpayment which is attributable to one or more
substantial wealth tax valuation understatement,
subsection (a) shall be applied--
``(i) in the case of a substantial wealth
tax valuation understatement which is a gross
wealth tax valuation misstatement, by
substituting `50 percent' for `20 percent', and
``(ii) in any other case, by substituting
`30 percent' for `20 percent'.
``(B) Gross wealth tax valuation misstatement.--For
purposes of subparagraph (A), the term `gross wealth
tax valuation misstatement' means a substantial wealth
tax valuation understatement, as determined under
paragraph (1) by substituting `40 percent' for `65
percent'.''.
(e) Clerical Amendment.--The table of subtitles of such Code is
amended by inserting after the item relating to subtitle B the
following new item:
``Subtitle B-1--Wealth Tax''.
(f) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after December 31, 2022.
(g) Periodic Reports.--Not later than January 1, 2025, and every 2
years thereafter, the Secretary of the Treasury (or the Secretary's
delegate) shall submit to Congress a report on the tax imposed under
chapter 18 of the Internal Revenue Code of 1986 (as added by this Act),
including any issues related to the administration and enforcement of
such tax.
SEC. 3. STRENGTHENING DISCLOSURE REQUIREMENTS.
(a) Regulatory Authority.--The Secretary of the Treasury (or the
Secretary's delegate) may issue such rules and regulations as necessary
to prevent taxpayers from avoiding the purpose of information reporting
requirements under the Internal Revenue Code of 1986 by placing assets
in any foreign corporation, partnership, or trust in which the taxpayer
holds directly or indirectly, a significant interest as the sole or
principal owner or the sole or principal beneficial owner.
(b) FATCA Enforcement Plan.--The Secretary of the Treasury (or the
Secretary's delegate) shall develop a comprehensive plan for managing
efforts to leverage data collected under chapter 4 of the Internal
Revenue Code of 1986 in agency compliance efforts. Such plan shall
include an evaluation of the extent to which actions being undertaken
as of the date of the enactment of this Act for the enforcement of the
requirements of such chapter improve voluntary compliance and address
noncompliance with such requirements.
SEC. 4. INTERNAL REVENUE SERVICE FUNDING.
(a) In General.--Subchapter A of chapter 80 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 7813. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to the Secretary for each
of fiscal years 2022 through 2032--
``(1) for enforcement of this title, $70,000,000,000,
``(2) for taxpayer services, $10,000,000,000, and
``(3) for business system modernization,
$20,000,000,000.''.
(b) Clerical Amendment.--The table of sections for subchapter A of
chapter 80 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Sec. 7813. Authorization of appropriations.''.
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